According to the Interim Budget presented by Finance Minister P Chidambaram in Parliament, Rs 35,000 crore of subsidy due in the fourth quarter will be carried over to the next financial year.

In all, he has provided Rs 65,000 crore towards fuel subsidy in 2014-15.

The government had given fuel retailers Rs 27,772 crore cash subsidy for selling diesel, cooking gas and kerosene below cost in the first nine months of 2013-14.

The subsidy was Rs 16,000 crore short of the amount demanded by the Oil Ministry to cover for losses incurred on diesel and cooking fuel sales in the April-December period.

The Interim Budget also provides Rs 2,500 crore to fuel retailers for paying cash subsidy directly to cooking gas consumers. The scheme was put on hold last month.

The revised estimate for petroleum subsidy for 2013-14 is Rs 85,480 crore against a budget estimate of Rs 65,000 crore.

The revised estimate of the Central Plan Outlay of the Oil Ministry is Rs 107,406 crore (budget support Rs 15 crore and the remaining Rs 1,07,391 crore being generated by oil companies from their internal resources) for 2013-14 against the budget estimate of Rs 79,052 crore (budget support Rs 43 crore and IEBR Rs 79,009 crore).

Deepak Mahurkar of PwC India said, "Provision for lesser petroleum subsidies will necessitate the government to pass on more cost of crude to diesel and PDS (LPG and kerosene) consumers. For the development of the petroleum sector, that is welcome."

However, attempts to keep oil companies' share of the subsidy burden at a pre-determined ceiling seems difficult, he added.